I would imagine it would work similar to the UK's national health service.

There is a national free health service for any British citizen that wants to use it. There is also an option for private health care if you wish to use and pay for it, you arent forced to use the free one but the doctors are equally as good.

This would then enable the hospitals to approach trading as 1 giant entity rather than individual entities giving them a much stronger bargaining position and buying power over pharmaceutical companies.

Doctors on either private and free are both paid really well! I've have seen NHS doctors driving sports cars E.G. Audi R8. So paying off loans wouldn't be a problem if they smart with their money.

The USA is a MUCH bigger country and economy than the UK so in my personal opinion I could see it working a lot better than it currently does in the UK.